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How to Have a Successful Outsourcing Relationship

Introduction

The first thing to understand when you consider an outsourcing deal is that it is going to be a long-term arrangement. The foundation to a successful relationship has to be laid at the very start, at the stage of negotiations. Here are some of the most important steps that have helped companies in establishing a successful relationship. These practices are favored by companies from major outsourcing destinations like India.

Stay in Touch Where it Matters

Talking between the parties does not end with signing of the SLA. It is only the beginning. The key personnel from both sides should have a good working relationship and understand each other. Studies into outsourcing indicate precisely this- good peer-to-peer relationships and regular contact with one's counterpart help sustain the outsourcing relationship success. It is good to have a single point of contact, as this helps to avoid confusion. A good way to do this is to have one project manager per project of per associate.

Be Specific

The parties should set well defined criteria and quantify the objectives at the very start of the association, put down clearly on paper. It helps the buyer to compare actual performance with the pre-defined goals. It also helps the vendor in that they get to measure their own performance and see where they stand. The parties should be clear on objectives, service quantity, quality standards and customer satisfaction, all in measurable terms.

Have a Special Team


The companies involved in outsourcing agreements should set up special boards or committees devoted to the success of the deal. These boards or committees have to develop the best strategies for effective outsourcing management. This team can also be useful to identify issues and resolve them quickly. This way, the company will have a team of people to fall back on to work out plans, issues and conflicts.

Have Rewards and Penalties

When the pricing is performance based, it motivates the vendor to meet or even exceed the client expectations. Give out incentives when the vendor exceeds the expectations and do not hesitate to set up penalties for falling short of the mutually agreed standards. This way the parties will have a clear understanding on payments, commitments and also help both to understand the deal better.

Reviews

It helps a great deal to have formal review meetings regularly. These meetings help to resolve problems before they escalate and also develop an understanding of what the future goals and objectives are. These meetings can be used to discuss products and deliverables.

It can be greatly frustrating for the client when they are not informed regularly on the developments. Without regular meetings and reviews, it is also easy for the vendor to misunderstand the requirements and deviate from what is actually needed. All of this leads to a lot of trouble later.

Training


The client has to have a system for ongoing training of the vendor personnel. This is needed so that the business goals of both parties are aligned the right way. With regular training, the vendor's personnel develop a good understanding of the issues that drive the client's requirement. The area of training could be management, IT or other areas of technology depending on the client's business and outsourcing requirements.

Know Each Other's Culture

This is the most relevant when Asian countries like India deal with the western countries. There is a huge cultural difference and this needs to be understood and bridged. It helps to have cultural dos, educate personnel on the other country's culture and participate in the other company's quality programs.
 
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